If the marginal propensity to consume is 0.75 and investment spending decreases by $20 billion, what will be the overall effect on GDP?
a. GDP will decrease by $20 billion
b. GDP will increase by $15 billion
c. GDP will decrease by $80 billion
d. GDP will decrease by $30 billion
e. GDP will decrease by $26.7 billion
C
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Economics is the study of how people:
a. vote for political leaders who decide what is to be produced. b. make choices to produce and consume goods and services. c. establish social institutions that maximize well-being. d. develop value systems that affect their consumption choices.
In a perfectly competitive industry, any restrictions that prevent new firms from entering
A. reduce the average cost of production. B. hinder economic efficiency. C. lead to negative profits. D. guarantee that all existing firms will earn exactly a zero profit.
Firms that are most likely to buy marketable pollution rights are those that produce the most pollution per unit of output produced
Indicate whether the statement is true or false
If real GDP per person in a country equals $20,000 and 40 percent of the population is employed, then average labor productivity equals:
A. $8,000. B. $20,000. C. $50,000. D. $40,000.